December Retail Sales Decline

Statistics Canada reports widespread declines in all sectors pushed retail sales down 5.4% in December to $33.0 billion.

The 5.4 % drop in December retail sales was the largest monthly decline in over 15 years, exceeding the 4.5% sales drop in January 1998 when an ice storm crippled part of the country. Statistics Canada reports when combined with the declines observed since October, retail sales in December were at their lowest level since November 2006. In December, three-quarters of the overall retail decline stemmed from the automotive sector. If the automotive sector (which includes new, used and recreational vehicle and parts dealers as well as gasoline stations), is excluded retail sales fell 1.8%. In volume terms, retail sales fell 4.1%, mostly reflecting a large reduction in unit sales of motor vehicles at new car dealers. Sales at gasoline stations fell 11.7% in December, and have dropped 28.8% since September 2008.This is largely due to falling prices at the pump. In non-automotive retailing, the largest decline in December was in the building and outdoor home supplies stores sector, where sales fell 5.6%. Sales in this sector have been falling since September 2008 as housing has slumped. Holiday shopping in December was also down. Sales in the clothing and accessories stores sector fell 3.7% in December, continuing several months of declines. Sales at furniture, home furnishings and electronics stores and miscellaneous retailers (such as sporting goods and book stores) declined by more than 2%. General merchandise stores were affected to a lesser extent, as their sales fell 0.4%. Retail sales fell by at least 3% in all provinces in December. The largest decline among all provinces was a 6.2% sales drop in Alberta. Sales in this province have been generally weak throughout 2008 after reaching a plateau in 2007.